U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-Q





x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended: March
31, 2010





 ̈ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934





Commission
file number:000-53326





DRC VENTURES, INC.(Exact
      name of registrant as specified in its
charter)





Nevada
                  26-2423443(State
      or other jurisdiction of incorporation or organization)
                  (I.R.S.
      Employer Identification
No.)





497
Willow Street, South Hempstead, New York 11550


(Address
of principal executive offices)





(516)
594-4401


(Issuer's
telephone number)





(Former
      name, former address and formerfiscal
      year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.    x  Yes 
  ̈ 
No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every


Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).


 ̈ Yes   ̈ No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer 
        ̈
              Accelerated filer 
          ̈Non-accelerated filer 
          ̈ 
      (Do not check if a smaller reporting company)
              Smaller reporting company 
         x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). x Yes  ̈ No





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.        ̈ Yes    ̈ No








APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:  At May 12, 2010 there were 1,000,000
shares of common stock outstanding.


1





PART
I — FINANCIAL INFORMATION





Item 1.
Financial Statements.





PageBalance
      Sheets as of March 31, 2010 (unaudited) and June 30, 2009
      (audited)
                F-1Statements
      of Operations for the three months ended March 31, 2010 and 2009 and the
      period from April  15, 2008 (date of inception) to March 31, 2010
      (unaudited)
                F-2Statements
      of Operations for the nine months ended March 31, 2010 and 2009 and the
      period from April  15, 2008 (date of inception) to March 31, 2010
      (unaudited)
                F-3Statement
      of Stockholder’s Deficit as of March 31, 2010 (unaudited)
                F-4Statements
      of Cash Flows for the nine months ended March 31, 2010 and 2009 and the
      period from January 22, 2008 (date of inception) to March 31, 2010
      (unaudited)
                F-5Notes
      to Financial Statements
                F-6


2





DRC
      Ventures, Inc.Balance
      Sheet(A
      Development Stage Company)





As ofMarch 31,
                          
                          
                          June 30,2010 (unaudited)
                          
                          
                          2009 (audited)ASSETSCURRENT
      ASSETSCash
                          
                          $
                          11
                          
                          
                          $
                          520TOTAL
      CURRENT ASSETS
                          
                          
                          11
                          
                          
                          
                          520TOTAL
      ASSETS
                          
                          
                          11
                          
                          
                          
                          520LIABILITIES AND STOCKHOLDERS'
      DEFICITLIABILITIESCURRENT
      LIABILITIESShareholder
      Loan
                          
                          $
                          16,205
                          
                          
                          $
                          12,435Accrued
      Expenses
                          
                          
                          1,820
                          
                          
                          
                          1,043TOTAL
      CURRENT LIABILITIES
                          
                          
                          18,025
                          
                          
                          
                          13,478TOTAL
      LIABILITIES
                          
                          
                          18,025
                          
                          
                          
                          13,478STOCKHOLDERS'
      DEFICITPreferred
      stock ($0.0001 par value; 10,000,000 shares authorized;none
      issued and outstanding)
                          
                          
                          -
                          
                          
                          
                          -Common
      stock ($0.0001 par value; 100,000,000 shares authorized;1,000,000
      shares issued and outstanding)
                          
                          
                          100
                          
                          
                          
                          100Stock
      Subscription Receivable
                          
                          
                          (100
                          )
                          
                          
                          (100
                          )Retained
      Deficit
                          
                          
                          (18,014
                          )
                          
                          
                          (12,958
                          )TOTAL
      STOCKHOLDERS' DEFICIT
                          
                          
                          (18,014
                          )
                          
                          
                          (12,958
                          )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                          
                          $
                          11
                          
                          
                          $
                          520





The
accompanying notes are an integral part of these financial
statements.


F-1





DRC
      Ventures, Inc.(A
      Development Stage Company)Statement
      of Operations (unaudited)





CumulativeFor the three months ended
                      
                      
                      SinceMarch 31,
                      
                      
                      March 31,
                      
                      
                      Inception2010
                      
                      
                      2009
                      
                      
                      April 15, 2008REVENUES:Income
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Total
      Revenue
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -EXPENSES:Professional
      Fees
                      
                      
                      1,500
                      
                      
                      
                      1,000
                      
                      
                      
                      14,695Selling,
      General, and Administrative
                      
                      
                      -
                      
                      
                      
                      303
                      
                      
                      
                      1,499Total
      Expenses
                      
                      
                      1,500
                      
                      
                      
                      1,303
                      
                      
                      
                      16,194OTHER INCOME/(EXPENSE)Interest
      Expense
                      
                      $
                      (324
                      )
                      
                      $
                      (317
                      )
                      
                      $
                      (1,820
                      )NET
      OTHER INCOME/(EXPENSE)
                      
                      
                      (324
                      )
                      
                      
                      (317
                      )
                      
                      
                      (1,820
                      )NET
      LOSS
                      
                      $
                      (1,824
                      )
                      
                      $
                      (1,620
                      )
                      
                      $
                      (18,014
                      )Basic
      and fully diluted net loss per common share:
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.02
                      )Weighted
      average common shares outstanding
                      
                      
                      1,000,000
                      
                      
                      
                      1,000,000
                      
                      
                      
                      1,000,000





The
accompanying notes are an integral part of these financial
statements.


F-2





DRC
      Ventures, Inc.(A
      Development Stage Company)Statement of Operations
      (unaudited)





CumulativeFor
      the nine months ended
                      
                      
                      SinceMarch
      31,
                      
                      
                      March
      31,
                      
                      
                      Inception2010
                      
                      
                      2009
                      
                      
                      April 15, 2008REVENUES:Income
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Total
      Revenue
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -EXPENSES:Professional
      Fees
                      
                      
                      3,700
                      
                      
                      
                      1,500
                      
                      
                      
                      14,695Selling,
      General, and Administrative
                      
                      
                      579
                      
                      
                      
                      617
                      
                      
                      
                      1,499Total
      Expenses
                      
                      
                      4,279
                      
                      
                      
                      2,117
                      
                      
                      
                      16,194OTHER INCOME/(EXPENSE)Interest
      Expense
                      
                      $
                      (777
                      )
                      
                      $
                      (717
                      )
                      
                      $
                      (1,820
                      )NET
      OTHER INCOME/(EXPENSE)
                      
                      
                      (777
                      )
                      
                      
                      (717
                      )
                      
                      
                      (1,820
                      )NET
      LOSS
                      
                      $
                      (5,056
                      )
                      
                      $
                      (2,834
                      )
                      
                      $
                      (18,014
                      )Basic
      and fully diluted net loss per common share:
                      
                      $
                      (0.01
                      )
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.02
                      )Weighted
      average common shares outstanding
                      
                      
                      1,000,000
                      
                      
                      
                      1,000,000
                      
                      
                      
                      1,000,000





The
accompanying notes are an integral part of these financial
statements.


F-3





DRC
      Ventures, Inc.Statement
      of Stockholders' Deficit (unaudited)(A Development Stage
    Company)





AdditionalCommonStock
                      
                      
                      Preferredstock
                      
                      
                      Paid-in
                      
                      
                      DeficitShares
                      
                      
                      Amount
                      
                      
                      Shares
                      
                      
                      Amount
                      
                      
                      Capital
                      
                      
                      AccumulatedBalances,
      June 30, 2008
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (9,195
                      )Net
      income/(loss)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (3,763
                      )Issuance
      of common shares
                      
                      
                      1,000,000
                      
                      
                      
                      100
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Balances,
      June 30, 2009
                      
                      
                      1,000,000
                      
                      
                      $
                      100
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (12,958
                      )Net
      income/(loss)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (5,056
                      )Balances,
      March 31, 2010
                      
                      
                      1,000,000
                      
                      
                      $
                      100
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (18,014
                      )





The
accompanying notes are an integral part of these financial
statements.


F-4





DRC
      Ventures, Inc.(A
      Development Stage Company)Statement of Cash Flows
      (unaudited)





CumulativeFor
      the
                                  
                                  
                                  Totalsnine
      months ended
                                  
                                  
                                  SinceMarch
      31,
                                  
                                  
                                  March
      31,
                                  
                                  
                                  Inception2010
                                  
                                  
                                  2009
                                  
                                  
                                  April 15, 2008CASH FLOWS FROM OPERATING
      ACTIVITIESNet
      loss
                                  
                                  $
                                  (5,056
                                  )
                                  
                                  $
                                  (2,834
                                  )
                                  
                                  $
                                  (18,014
                                  )Adjustments
      to reconcile net (loss) to net cash used in operations:Changes
      in Assets and Liabilities:(Increase)/Decrease
      in Accrued Expenses
                                  
                                  
                                  777
                                  
                                  
                                  
                                  717
                                  
                                  
                                  
                                  1,820NET
      CASH PROVIDED BY (USED IN)  OPERATING ACTIVITIES
                                  
                                  
                                  (4,279
                                  )
                                  
                                  
                                  (2,117
                                  )
                                  
                                  
                                  (16,194
                                  )CASH FLOWS FROM INVESTING
      ACTIVITIES:Note
      Payable to Related Party
                                  
                                  
                                  3,770
                                  
                                  
                                  
                                  2,125
                                  
                                  
                                  
                                  16,205NET
      CASH PROVIDED BY (USED IN)  INVESTING ACTIVITIES
                                  
                                  
                                  3,770
                                  
                                  
                                  
                                  2,125
                                  
                                  
                                  
                                  16,205CASH
      AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD
                                  
                                  
                                  520
                                  
                                  
                                  
                                  5
                                  
                                  
                                  
                                  -CASH
      AND CASH EQUIVALENTS, END OF THE PERIOD
                                  
                                  $
                                  11
                                  
                                  
                                  $
                                  13
                                  
                                  
                                  $
                                  11





The
accompanying notes are an integral part of these financial
statements.


F-5





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE A- BUSINESS
ACTIVITY





DRC
Ventures, Inc. (the “Company”) was organized under the laws of the State of
Nevada on April 15, 2008 as a corporation with a year end of June 30. The
Company’s objective is to acquire or merge with a target business or company in
a business combination.





NOTE B—GOING
CONCERN





The
accompanying financial statements have been prepared on a going concern basis,
which assumes the Company will realize its assets and discharge its liabilities
in the normal course of business.  As reflected in the accompanying
financial statements, the Company has a deficit accumulated during the
development stage of $17,654 used cash from operations of $16,194 since its
inception, and has a negative working capital of $18,014 at March 31,
2010.





The
Company’s ability to continue as a going concern is dependent upon its ability
to generate future profitable operations and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due.  The Company’s ability to
continue as a going concern is also dependent on its ability to find a suitable
target company and enter into a possible reverse merger with such
company.  Management’s plan includes obtaining additional funds by
equity financing through a reverse merger transaction and/or related party
advances; however there is no assurance of additional funding being
available.  These circumstances raise substantial doubt about the
Company’s ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might arise as a result of this
uncertainty.





NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES





Basis of
Presentation- The financial statements included herein were prepared
under the accrual basis of accounting.





Cash and Cash
Equivalents- For purposes of the Statement of Cash Flows, the Company
considers liquid investments with an original maturity of three months or less
to be cash equivalents.





Management’s Use of
Estimates- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates. The financial statements above reflect all of the costs of
doing business.


F-6





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D





Revenue Recognition-
The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition.  The Company recognizes revenue
when it is realized or realizable and earned less estimated future doubtful
accounts.  The Company considers revenue realized or realizable and
earned when all of the following criteria are met:





(i)
            persuasive
      evidence of an arrangement exists,




(ii)
            the
      services have been rendered and all required milestones
      achieved,




(iii)
            the
      sales price is fixed or determinable,
and




(iv)
            collectability
      is reasonably assured.





Comprehensive Income (Loss)
- The Company reports Comprehensive income and its components following
guidance set forth by section 220-10 of the FASB Accounting Standards
Codification which establishes standards for the reporting and display of
comprehensive income and its components in the financial statements. There were
no items of comprehensive income (loss) applicable to the Company during the
period covered in the financial statements.





Net Income per Common
Share- Net loss per common share is computed pursuant to section
260-10-45 of the FASB Accounting Standards Codification.  Basic net
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding during the period.  Diluted net
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock and potentially outstanding shares of common stock
during each period.  There were no potentially dilutive shares
outstanding as of March 31, 2010.





Deferred Taxes- The
Company accounts for income taxes under Section 740-10-30 of the FASB Accounting
Standards Codification.  Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to
reverse.  Deferred tax assets are reduced by a valuation allowance to
the extent management concludes it is more likely than not that the assets will
not be realized.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the statements of operations in the period that includes the
enactment date.





Fair Value of Financial
Instruments- The carrying amounts reported in the balance sheet for cash,
accounts receivable and payable approximate fair value based on the short-term
maturity of these instruments.





Accounts Receivable-
Accounts deemed uncollectible are written off in the year they become
uncollectible. As of March 31, 2010, the balance in Accounts Receivable was
$0.





Impairment of Long-Lived
Assets- The Company evaluates the recoverability of its fixed assets and
other assets in accordance with section 360-10-15 of the FASB Accounting
Standards Codification for disclosures about Impairment or Disposal of
Long-Lived Assets.  Disclosure requires recognition of impairment of
long-lived assets in the event the net book value of such assets exceeds its
expected cash flows. If so, it is considered to be impaired and is written down
to fair value, which is determined based on either discounted future cash flows
or appraised values. The Company adopted the statement on inception. No
impairments of these types of assets were recognized during the period ended
March 31, 2010.


F-7





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D





Stock-Based
Compensation- The Company accounts for stock-based compensation using the
fair value method following the guidance set forth in section 718-10 of the FASB
Accounting Standards Codification for disclosure about Stock-Based Compensation.
This section requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the grant-date
fair value of the award (with limited exceptions). That cost will be recognized
over the period during which an employee is required to provide service in
exchange for the award- the requisite service period (usually the vesting
period). No compensation cost is recognized for equity instruments for which
employees do not render the requisite service.





Fair Value for Financial
Assets and Financial Liabilities- The Company follows paragraph
825-10-50-10 of the FASB Accounting Standards Codification for disclosures about
fair value of its financial instruments and paragraph 820-10-35-37 of the FASB
Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair
value of its financial instruments.  Paragraph 820-10-35-37
establishes a framework for measuring fair value in accounting principles
generally accepted in the United States of America (U.S. GAAP), and expands
disclosures about fair value measurements. To increase consistency and
comparability in fair value measurements and related disclosures, Paragraph
820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three broad
levels.  The fair value hierarchy gives the highest priority to quoted
prices (unadjusted) in active markets for identical assets or liabilities and
the lowest priority to unobservable inputs.  The three levels of fair
value hierarchy defined by Paragraph 820-10-35-37 are described
below:





Level 1
            Quoted
      market prices available in active markets for identical assets or
      liabilities as of the reporting
date.




Level 2
            Pricing
      inputs other than quoted prices in active markets included in Level 1,
      which are either directly or indirectly observable as of the reporting
      date.




Level 3
            Pricing
      inputs that are generally observable inputs and not corroborated by market
      data.





The carrying amounts of the Company’s
financial assets and liabilities, such as cash and accrued expenses, approximate
their fair values because of the short maturity of these instruments. The
Company’s note payable approximates the fair value of such instrument based upon
management’s best estimate of interest rates that would be available to the
Company for similar financial arrangement at March 31, 2010.





The Company does not have any assets or
liabilities measured at fair value on a recurring or a non-recurring basis,
consequently, the Company did not have any fair value adjustments for assets and
liabilities measured at fair value at March 31, 2010, nor gains or losses are
reported in the statement of operations that are attributable to the change in
unrealized gains or losses relating to those assets and liabilities still held
at the reporting date for the interim period ended March 31,
2010.


F-8





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D





Recent Accounting
Pronouncements- In June 2009, the FASB approved the “FASB Accounting
Standards Codification” (the “Codification”) as the single source of
authoritative nongovernmental U.S. GAAP which commenced on July 1,
2009.  The Codification does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
the authoritative literature related to a particular topic in one
place.  All existing accounting standard documents will be superseded
and all other accounting literature not included in the Codification will be
considered non-authoritative. The Codification is effective for interim and
annual periods ending after September 15, 2009.  The adoption did
not have a material impact on the Company’s financial position, results of
operations or cash flows.





In August 2009, the FASB issued
the FASB Accounting Standards Update No. 2009-04, Accounting for Redeemable Equity
Instruments - Amendment to Section 480-10-S99, which represents an update
to section 480-10-S99, distinguishing liabilities from equity, per EITF Topic
D-98, Classification and
Measurement of Redeemable Securities.  The Company does not
expect the adoption of this update to have a material impact on its consolidated
financial position, results of operations or cash flows.





In August 2009, the FASB issued
the FASB Accounting Standards Update No. 2009-05, Fair Value Measurement and
Disclosures Topic 820 – Measuring Liabilities at Fair Value, which
provides amendments to subtopic 820-10, Fair Value Measurements and Disclosures
– Overall, for the fair value measurement of liabilities.  This Update
provides clarification that in circumstances in which a quoted price in an
active market for the identical liability is not available, a reporting entity
is required to measure fair value using one or more of the following techniques:
1. A valuation technique that uses: a. The quoted price of the identical
liability when traded as an asset b. Quoted prices for similar liabilities or
similar liabilities when traded as assets. 2. Another valuation technique that
is consistent with the principles of topic 820; two examples would be an income
approach, such as a present value technique, or a market approach, such as a
technique that is based on the amount at the measurement date that the reporting
entity would pay to transfer the identical liability or would receive to enter
into the identical liability. The amendments in this Update also clarify that
when estimating the fair value of a liability, a reporting entity is not
required to include a separate input or adjustment to other inputs relating to
the existence of a restriction that prevents the transfer of the liability. The
amendments in this Update also clarify that both a quoted price in an active
market for the identical liability when traded as an asset in an active market
when no adjustments to the quoted price of the asset are required are Level 1
fair value measurements.  The Company does not expect the adoption of
this update to have a material impact on its consolidated financial position,
results of operations or cash flows.





In September 2009, the FASB issued
the FASB Accounting Standards Update No. 2009-08, Earnings Per Share – Amendments to
Section 260-10-S99,which represents technical corrections to topic
260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share
for a Period that includes a Redemption or an Induced Conversion of a Portion of
a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of
Earnings per Share for the Redemption or Induced Conversion of Preferred
Stock. The Company does not expect the adoption of this update to have a
material impact on its consolidated financial position, results of operations or
cash flows.





In September 2009, the FASB issued
the FASB Accounting Standards Update No. 2009-09, Accounting for Investments-Equity
Method and Joint Ventures and Accounting for Equity-Based Payments to
Non-Employees.  This Update represents a correction to Section
323-10-S99-4, Accounting by an
Investor for Stock-Based Compensation Granted to Employees of an Equity Method
Investee. Additionally, it adds observer commentAccounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than Employees
to the Codification. The Company does not expect the adoption to have a material
impact on its consolidated financial position, results of operations or cash
flows.


F-9





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE C—SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES—CONT’D





Recent Accounting
Pronouncements (Cont’d)





In September 2009, the FASB issued
the FASB Accounting Standards Update No. 2009-12, Fair Value Measurements and
Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets
Value Per Share (or Its Equivalent), which provides amendments to
Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair
value measurement of investments in certain entities that calculate net asset
value per share (or its equivalent). The amendments in this Update permit, as a
practical expedient, a reporting entity to measure the fair value of an
investment that is within the scope of the amendments in this Update on the
basis of the net asset value per share of the investment (or its equivalent) if
the net asset value of the investment (or its equivalent) is calculated in a
manner consistent with the measurement principles of Topic 946 as of the
reporting entity’s measurement date, including measurement of all or
substantially all of the underlying investments of the investee in accordance
with Topic 820. The amendments in this Update also require disclosures by major
category of investment about the attributes of investments within the scope of
the amendments in this Update, such as the nature of any restrictions on the
investor’s ability to redeem its investments at the measurement date, any
unfunded commitments (for example, a contractual commitment by the investor to
invest a specified amount of additional capital at a future date to fund
investments that will be make by the investee), and the investment strategies of
the investees. The major category of investment is required to be determined on
the basis of the nature and risks of the investment in a manner consistent with
the guidance for major security types in U.S. GAAP on investments in debt and
equity securities in paragraph 320-10-50-1B. The disclosures are required for
all investments within the scope of the amendments in this Update regardless of
whether the fair value of the investment is measured using the practical
expedient. The Company does not expect the adoption to have a material impact on
its consolidated financial position, results of operations or cash
flows.





Management does not believe that any
other recently issued, but not yet effective accounting pronouncements, if
adopted, would have a material effect on the accompanying financial
statements.





NOTE D-SUPPLEMENTAL CASH
FLOW INFORMATION





Supplemental
disclosures of cash flow information for the period ended March 31, 2010 and
2009 is summarized as follows:





Cash paid
during the period ended March 31, 2010 and 2009 for interest and income
taxes:





2010
                  
                  
                  2009Interest
                  
                  $
                  -
                  
                  
                  $
                  -Taxes
                  
                  $
                  -
                  
                  
                  $
                  -





NOTE E-SEGMENT
REPORTING





The
Company follows the guidance set forth by section 280-10 of the FASB Accounting
Standards Codification for reporting and disclosure on operating segments of the
Company. It also requires segment disclosures about products and services,
geographic areas, and major customers. The Company determined that it did not
have any separately reportable operating segments as of March 31,
2010.


F-10





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE F-INCOME
TAXES





Due to
the operating loss and the inability to recognize an income tax benefit there is
no provision for current or deferred federal or state income taxes for year
ended June 30, 2009





Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amount used for federal and state income tax purposes.





The
Company’s total deferred tax asset, calculated using federal and state effective
tax rates, as of June 30, 2009 is as follows:




Total
      Deferred Tax Asset
                  
                  $
                  4,405Valuation
      Allowance
                  
                  
                  (4,405
                  )Net
      Deferred Tax Asset
                  
                  
                  -





The
reconciliation of income taxes computed at the federal statutory income tax rate
to total income taxes for the tax years ended June 30, 2009 and 2008 is as
follows:





2009
                  
                  
                  2008Income
      tax computed at the federal statutory rate
                  
                  
                  34
                  %
                  
                  
                  34
                  %State
      income tax, net of federal tax benefit
                  
                  
                  0
                  %
                  
                  
                  0
                  %Total
                  
                  
                  34
                  %
                  
                  
                  34
                  %Valuation
      allowance
                  
                  
                  -34
                  %
                  
                  
                  -34
                  %Total
      deferred tax asset
                  
                  
                  0
                  %
                  
                  
                  0
                  %





Because
of the Company’s lack of earnings history, the deferred tax asset has been fully
offset by a valuation allowance. The valuation allowance increased (decreased)
by approximately $1,279 and $3,126 for the years ending June 30, 2009 and 2008,
respectively.





As of
June 30, 2009, the Company had a federal and state net operating loss carry
forward in the amount of approximately $ 12,958 which expires in the year ending
June 30, 2029.





NOTE G-CAPITAL
STOCK





The
Company is authorized to issue 100,000,000 common shares at $0.0001 par value
per share.





During
the periods ended March 31, 2010, the Company issued no shares of common
stock.





As of
March 31, 2010, the Company had the following shares of common stock
outstanding:




Name
                    
                    Number of shares
                    
                    Cash or Services
                    
                    Price per share
                    
                    
                    Total valueDavid
      Powell
                    
                    
                    500,000
                    
                    founder
      shares
                    
                    $
                    0.0001
                    
                    
                    $
                    50Ronald
      Williams
                    
                    
                    500,000
                    
                    founder
      shares
                    
                    $
                    0.0001
                    
                    
                    $
                    501,000,000
                    
                    
                    
                    
                    
                    
                    
                    $
                    100





The
Company is authorized to issue 10,000,000 preferred shares at $0.0001 per
share.





During
the period ended March 31, 2010, the Company issued no preferred
stock.





As of
March 31, 2010, the Company had no preferred shares
outstanding.


F-11





DRC
      VENTURES, INC.
              NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS
              AS OF MARCH 31,
  2010





NOTE H-DEVELOPMENT STAGE
COMPANY





The
Company is in the development stage as of March 31, 2010 and to date has had no
significant operations. Recovery of the Company assets is dependent on future
events, the outcome of which is indeterminable. In addition, successful
completion of the Company’s development program and its transition, ultimately,
to attaining profitable operations is dependent upon obtaining adequate
financing to fulfill its development activities and achieving a level of sales
adequate to support the Company’s cost structure.





NOTE I—SHAREHOLDER
LOAN/RELATED PARTY





The
Company has signed a series of promissory notes with a related
party.  The total amount of loan outstanding is $16,205 and it is
payable upon demand, the annual interest rate on this note is
8%.  Accrued interest, but not paid as of March 31, 2010 is
1,820.


F-12


Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations





Overview.





DRC
Ventures, Inc. (“we”, “us” or the “Company”) was organized in the State of
Nevada on April 15, 2008.  We are a developmental stage company and have
not generated any revenues to date.  We were organized to serve as a
vehicle for a business combination through a capital stock exchange, merger,
reverse acquisition, asset acquisition or other similar business combination (a
“Business Combination”) with an operating or development stage business (the
“Target Business”) which desires to utilize our status as a reporting company
under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).   We are in the process of identifying and evaluating targets
for a Business Combination.  We are not presently engaged in, and will not
engage in, any substantive commercial business operations unless and until we
consummate a Business Combination.





Our
management has broad discretion with respect to identifying and selecting a
prospective Target Business.  We have not established any specific
attributes or criteria (financial or otherwise) for prospective Target
Businesses.  Our sole officer and director has never served as an officer
or director of a development stage public company with the business purpose of
entering into a transaction such as that contemplated by our Company. 
Accordingly, he may not successfully identify a Target Business or conclude a
Business Combination.





Any
entity with which we consummate a Business Combination will be subject to
numerous risks in connection with its operations.  To the extent we affect
a Business Combination with a financially unstable company or an entity in its
early stage of development or growth, including entities without established
records of sales or earnings, we may be affected by numerous risks inherent in
the business and operations of financially unstable and early stage or potential
emerging growth companies.  If we consummate a Business Combination with a
foreign entity, we will be subject to all of the risks attendant to foreign
operations.  Although our management will endeavor to evaluate the risks
inherent in a particular Target Business, we cannot assure you that we will
properly ascertain or assess all significant risk factors.





We expect
that in connection with any Business Combination, we will issue a significant
number of shares of our common stock (equal to at least 80% of the total number
of shares outstanding after giving effect to the transaction and likely a
significantly higher percentage) in order to ensure that the Business
Combination qualifies as a tax-free transaction under federal tax laws. 
The issuance of additional shares of our capital stock will:




·
            significantly
      reduce the equity interest of our stockholders prior to the transaction;
      and





·
            cause
      a change in control and likely result in the resignation or removal of our
      present officers and directors.





Our
management anticipates that our Company likely will affect only one Business
Combination, due primarily to our financial resources and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a Target
Business in order to achieve a tax-free reorganization.  This lack of
diversification should be considered a substantial risk in investing in us
because it will not permit us to offset potential losses from one venture
against potential gains from another.





Liquidity and Capital
Resources.





At March
31, 2010, we had a de minimus amount of cash on hand.  Our existing cash
reserves will not be sufficient to cover our operating costs and expenses over
the next twelve months which we anticipate will comprise costs and expenses in
connection with the preparation and filing of reports under the Exchange Act,
the identification and evaluation of targets for a Business Combination and,
possibly, a Business Combination, and we will require funds
therefor.





To date,
we have funded our operations through loans from our stockholders and, as of
March 31, 2010, we had borrowed an aggregate of $16,205 from them, including
$3,770 during the nine months then ended.  Our stockholder has advised us
that it expects to fund additional costs and expenses that we will incur through
loans or further investment in the Company, as and when
necessary.


3





We cannot
provide investors with any assurance that we will have sufficient capital
resources to identify a suitable Target Business, to conduct effective due
diligence as to any Target Business or to consummate a Business
Combination.  As a result of our negative working capital, our losses since
inception, and failure to generate revenues from operations, our financial
statements include a note in which our auditor has expressed doubt about our
ability to continue as a "going concern."





Results of
Operations.





Since our
inception, we have not generated any revenues.  We reported a net loss for
the three and nine month periods ended March 31, 2010 of $1,824 and $5,056,
respectively, and a net loss since inception of $18,014.  The Company has
used cash from operations of $16,194 since its inception, consisting primarily
of professional fees, and has a negative working capital of $18,014 at March 31,
2010.





We do not
expect to engage in any substantive activities unless and until such time as we
enter into a Business Combination, if ever.  We cannot provide investors
with any assessment as to the nature of a Target Business’s operations or
speculate as to the status of its products or operations, whether at the time of
the Business Combination it will be generating revenues or its future
prospects.





Item
3. Quantitative and Qualitative Disclosures about Market Risk.





Not applicable.





Item
4(T). Controls and Procedures.





Evaluation
of Disclosure Controls and Procedures





As of
March 31, 2010, the Company’s management carried out an evaluation, under the
supervision and with the participation of the Company’s Chief Executive Officer,
who is the Company’s principal executive officer and principal financial
officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on such
evaluation, the Company’s Chief Executive Officer has concluded that the
Company's disclosure controls and procedures were effective.




Changes
in Internal Controls





There
have been no changes in the Company’s internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three
months ended March 31, 2010 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial
reporting.





PART
II — OTHER INFORMATION





Item
1. Legal Proceedings.





The
Company is not a party to any legal proceeding or litigation.





Item
1A. Risk Factors.





Smaller
reporting companies are not required to provide the information required by this
item.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





(a) During
the three months ended March 31, 2010, the Company did not issue any
securities.





(b) Not
applicable.


4





(c)
During the three months ended March 31, 2010, neither the issuer nor any
"affiliated purchaser," as defined in Rule 10b-18(a)(13), purchased any shares
or other units of any class of the issuer's equity securities.





Item
3. Defaults Upon Senior Securities.





None.





Item
4. (Removed and Reserved)





Item
5. Other Information.





(a) None.





(b) The Company has not adopted any
procedures by which security holders may recommend nominees to the registrant's
board of directors.





Item
6. Exhibits.





Exhibit
              
              Description31.1
              
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
      respect to the registrant’s Quarterly Report on Form 10-Q for the quarter
      ended March 31, 2010.32.1*
              
              Certification
      of the Company’s Principal Executive Officer and Principal Financial
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes Oxley Act of
2002.





* 
Pursuant to Commission Release No. 33-8238, this certification will be
treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as
part of such report for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended, or otherwise subject to the liability of
Section 18 of the Securities Exchange Act of 1934, as amended, and this
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, except to the extent that the registrant specifically
incorporates it by reference.





5




SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused the Report to be signed on its behalf by the
undersigned thereunto duly authorized.





DRC
      VENTURES, INC.Dated:
      May 12, 2010
                By:
                /s/ Ronald WilliamsName:
                Ronald
      WilliamsTitle:
                President,
      Principal Executive Officer
                  and
      Principal Financial
Officer


6